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$A falls heavily after weak jobs data

Jason Cadden

The Australian dollar has lost more than one US cent since the release of disappointing local jobs numbers.

At 1700 AEST on Thursday, the local unit was trading at 92.43 US cents, down from an intraday peak of 93.56 US cents just before the employment figures were released.

The Australian dollar ended Wednesday's local session at 92.90 US cents.

"The Australian dollar fell off its three-month high perch, following the release of local job figures," CMC Markets sales trader Betty Lam said.

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"The currency was quick to react and tumbled at the news."

The total number of people with jobs in Australia fell 10,800 in August, seasonally adjusted, worse than market expectations of a rise of 10,000.

The unemployment rate rose slightly to touch a four-year high of 5.8 per cent.

Ms Lam said the jobs data raised the possibility that the Reserve Bank of Australia may cut the cash rate later in the year.

"The eternal monthly consideration of "will they or won't they cut rates?" was back to weighing on currency traders' minds today," she said.

Ms Lam expect the Australian dollar to stay in a range centred on around 92.50 US cents.

At 1700 AEST, the Australian dollar was at 91.94 Japanese yen, down from Wednesday's close of 93.16 yen, and at 69.46 euro cents, down from 70.09 euro cents.

During the offshore session on Thursday night, the US Labor Department will release its weekly unemployment claims figures, which is always a focus for the market.

Australian bond futures prices were boosted by the weaker than expected employment figures.

At 1630 AEST on Thursday, the September 10-year bond futures contract was trading at 95.965 (implying a yield of 4.035 per cent), up from 95.835 (4.165 per cent) on Wednesday.

The September three-year bond futures contract was at 97.070 (2.930 per cent), up from 96.950 (3.050 per cent).

Next week all eyes will be on the US Federal Reserve's policy meeting, where it is expected to make a decision on scaling back its massive bond purchase program designed to stimulate the American economy.